International marketing Session 2

Ana Colovic

The environments of international marketing

All marketing activities occur within legal, economic, cultural, political and other environments.

Each country has its own legal system, culture, socio-economic infrastructure etc.

The economic and political environment

• Economic factors:• Competition• Growth rate• Living standards• Tax regimes• Import controls

The economic and political environment

• Political factors:• stability• International relations• Freedom of speech• Political parties• Bribery and corruption among government officials• Terrorism• …

Risk

• Risk needs to be assessed systematically and monitored on a continuous basis.

• Macro risk - affects all foreign firms operating in a country

• Micro risk - applies to a particular company

The cultural environment

A nation’s culture represents a collective frame of reference through which a wide range of issues and problems are interpreted.

Culture consists of the following main elements: religion, language, social structure, shared beliefs and ethics, non-verbal language.

Legal aspects in international marketing

Local laws determine marketing practice. Legislation may exist regarding product characteristics, packaging and labeling, brand names, length of guarantees, pricing and promotion and many other issues.

There is no uniform law governing international trade, only the application of a country’s domestic law on international transactions.

Legal systems

• Three types of legal systems predominate in the modern world:

• Common law• Civil codes• Islamic law

Conflict of laws and jurisdiction

International business involves clashes between differing legal systems.

Legal action occurs (in general) in the country of the party that is being sued.

Jurisdiction issues within the European Union are covered by the Brussels Convention of 1982 and the Rome Convention of 1990.

Globalization

Globalization means different things to different people. Many elements affect globalization: the technological capacity of a country, access to large integrated markets, the competitiveness of firms, international institutions which provide the necessary framework.